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Final Rule Regarding Procurement Requirements


Nutrition Services Division Management Bulletin
Purpose: Policy, Beneficial Information

To: School Nutrition Program Sponsors

Number: NSD-SNP-02-2008

Attention: Food Service Director, Business Official, District and County Superintendents

Date: March 2008

Subject: United States Department of Agriculture Final Rule Regarding Procurement Requirements for National School Lunch, School Breakfast, and Special Milk Programs

Reference: Title 7, Code of Federal Regulations, Sections 3016, 3019, 210.21, 215.14, 220.16; Final Rule from Federal Register Vol. 72, no. 210, October 31, 2007, p.61479; United States Department of Agriculture Policy Memo-SP-02-2007

This Management Bulletin summarizes the final rule updating the United States Department of Agriculture (USDA) regulations regarding procurement and the procurement of services offered by a food service management company (FSMC), which is a commercial enterprise or a nonprofit organization which is or may be contracted with by a School Food Authority to manage any aspect of the school food service.

You can find the final rule document at the U.S. Government Printing Office Web site at http://edocket.access.gpo.gov/2007/pdf/E7-21420.pdf.

This final rule makes changes in a school food authority’s responsibilities for ensuring proper procurement procedures and contracts, limits a school food authority’s use of nonprofit school food service account funds to only those costs resulting from proper procurements and contracts, and clarifies a State agency’s responsibility to review and approve school food authority procurement procedures and contracts. This final rule also amends the Special Milk Program and School Breakfast Program regulations to align the procurement and contract requirements with those in the National School Lunch Program.

The final rule:

Applicable to cost reimbursable contracts and cost reimbursable contracts with fixed-fee provisions:

  1. The contractor identifies allowable and unallowable costs on billing documents.
  2. Requires the contractor to exclude unallowable costs from billing documents, and certify that only allowable costs are submitted for paymnet, and records have been kept that identify unallowable costs.

Regardless of the cost provision chosen, contractors are required to report discounts, rebates and other applicable credits, and school food authorities are required to limit expenditures of nonprofit school food services account funds to net allowable costs.

If you have questions, please contact the contract specialist assigned to your county, as listed on the Form Caseload, available under the Applications, Download Forms section in the Child Nutrition Information and Payment System, or send your questions by e-mail to SFSCONTRACTS@cde.ca.gov.

Questions:   School Food Service Contracts Unit | 916-319-0636
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